Distribution of regional income and regional funds in Europe 1989–1999: An exploratory spatial data analysis

The efforts of the European Commission to reduce regional inequalities over its territory continue to attract the attention of researchers. The purpose of this paper is to perform an exploratory investigation of the relationship between the spatial distribution of regional income and of regional development funds among 145 European regions over 1989–1999. Using a set of tools of spatial statistics, we first detect the presence of global and local spatial autocorrelation in the distribution of regional per capita incomes, traducing that rich (poor) regions tend to be clustered close to other rich (poor) regions, and in the distribution of regional growth rate and regional funds. Second, the results of LISA statistics conclude to the presence of spatial heterogeneity in the form of two spatial clusters of rich and poor regions over the decade, highlighting the persistence of a significant core-periphery pattern among European regions. Finally, an exploratory analysis reveals a negative correlation between growth and initial income, that tends to indicate β-convergence. A positive relationship between regional growth and structural funds is identified among the significant results as well. Only Andalucia, Galicia and Sterea Ellada show atypical linkages. These results suggest that further research should include spatial effects and the distribution of regional funds in the spatial econometric estimation of regional convergence in Europe.